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How do you make your stock portfolio to become perfectly diversified today i’m going to share with you guys how you can actually make that portfolio become diversified how much money you should have in each stock how many stocks you should hold how many stocks in different industries plus much more i cannot wait to share this with you guys today good day
Subscribers thank you so much for joining me today i am jeremy this is a financial education channel where we talk about personal finance entrepreneurship in the stock market in today we’re talking about how do you do a perfectly diversified portfolio so today i’m going to get into you guys i know how much money you should have in each stock how many stocks you
Should hold you know how many stocks in each industry all that kinds of things guys now first off as you will see today i do not personally implement this plan yet the reason i don’t do it yet is because i’m 27 years old and i can take some more risks i can put more money into less stocks so that’s why a lot of times right now i only hold two or three stocks at
A time because i can take more risks i’m 27 years old they had multiple businesses things like that and i’m naturally just more of a risk-taker and i’ve been doing this a really long time i’ve eight years of investing already so for all those reasons is why i don’t follow this plan yet but as i get older i will absolutely be following this plan once i reach age
Forty that’s when i will start to migrate into making this more my thing because then it won’t be nearly as much about building wealth but be more like preserving wealth and to preserve wealth you need a balanced portfolio that’s diversified so as i reach about age 40 then i’ll start move this plan if i am fortunate enough to reach an age i’ll start to move more
Toward this plan and probably by age 45 i’ll be a hundred percent in what i’m going to share with you guys today so there’s seven steps to it so the first one is you got to understand that you’re going to hold ten stocks in this diversified portfolio why ten stocks in not 100 stocks or 50 stocks or whatever the reason being is 10 stocks is a good amount where you
Can be very confident in those 10 companies but not not so if you if you invest in more than 10 companies how are you supposed to be so confident in company 28 as your word company 2 or company one you know you’re not even be close as competent and understanding that company or as confident because its stock number twenty-eight now stock number ten you’re still
Knowing the mirror nearly as confident as stock number ten that stock number one but at least it’s going to be a lot heck of a lot closer than having 40 or 50 stocks or something like that guys so that’s why i would personally understand that you got to have ten stocks in this portfolio that moves on in step number two so your first two stocks you’re going to want
To take your i want to pick – i would say commodity related stocks so either oil industry coal gas natural gas you could even picks things like solar stocks or electric companies water companies something that is mainly commodity related now these two stocks you want to pick one that’s a huge company and they don’t have a lot of growth but at the same time they’re
Huge they’re stable and those kinds of things so maybe that company maybe an exxonmobil a chevron a bp a royal dutch shell a company like that that’s well diversified that’s a huge company and they’re probably not going to grow that much but at the same time their revenues are staying stable they have a good balance sheet they pay dividends those kinds of things
So that’s the first start the second stock you’d want to be more of a growth commodity company so maybe you’re in something like a a solar company you know that builds solar panels those are those are i would consider commodity related type companies and there’s tons of those that are growing at substantial rates so maybe you want to be in one of those maybe you
Want to be in a smaller natural gas or oil company that has better growth in the chevron exxon those kinds of things so that’s a that’s the first two stocks you want to pick that are going to make up that portfolio or those stocks and if you’re wondering how much money you should have in each of them i’m going to get into that later in the in the video here number
Three number three step now you’re gonna pick two stocks that are tech related it’s the same idea here and it’s going to be for the rest of them going down one that’s a huge company that probably doesn’t have a ton of growth ahead of it but at the same time they’re they’re stable they’re huge they’re they’re well known those kinds of things and the other one is
Going to be more of a growth related company so that first company might represent something like maybe an apple for you know or a microsoft something like that microsoft an apple a huge tech company maybe an ibm until something like that that you feel comfortable with you understand the business well and all those kinds of things and it’s a huge corporation the
Other stock is going to be something that’s a much smaller tech company that’s maybe got much better growth maybe a facebook maybe you know some of the some of the cloud computing type stocks out there one of those type of tech companies so once again one stock huge stable and they’re very well known the other stock growth that goes into step number we are in step
Number four now step number four now you need another two stocks so these next two stocks you’re going to want to make up food related or drink related companies so this could include fast-food companies or restaurant companies this could include companies that you see in the supermarket shelves this could include companies like coke or pepsi or monster beverage
Something like that once again one huge company so maybe this huge company represents coca-cola that’s a monster food-related company and drink related company maybe the other ones a smaller craft beer company or something like that like a sam adams that has big growth but it’s much smaller so that’s once again you want to do that that goes into step number five
Now you want to pick two retail related stocks so once again a big company that’s pretty stable maybe a walmart represents us or target you know those companies doing much for growth at all but they’re pretty stable their revenues are pretty stable profits big balance sheets big companies well known there are going away to their tomorrow they might be going away
In 30 years or 40 years from now we’ll see but no time soon so one huge retail related stock the other one a big growth stock maybe that growth stocks and amazon or something like that guys you know a retail related stock that’s just they’re growing and growing and growing there’s there’s quite a few growing retailers out there whether they’re online or whether
The retail related as far as actually stores that are physical stores out there so that’s in depth the next one guys now number six is the last one you need to live stocks here these last two stocks need to be in categories that aren’t related to these other categories we just spoke about there’s a ton of stocks out there that are in industries that we didn’t even
Touch today so you want to pick two of those stocks maybe it’s a forward maybe it’s a gm maybe it’s tesla netflix you know and entertain industries tape stock you know caterpillar john deere there’s so many different stocks in industries that we daymond talked about here maybe it’s a stock like a johnson & johnson or a procter & gamble that’s a huge congo
Conglomerate that’s a consumer discretionary type stock maybe it’s in a wynn resorts i love wynn resorts that’s one of my favorite stocks a casino related stock or luxury resorts disney so pick two stocks that are from industries but are not from these particular industries because you already have two stocks from these other ones and then you’re going to want to
Invest in those now how much money are we talking you know here so that goes into step number seven the last step which is the 15 and 5 method 15 and 5 method what that means is for each of those stocks shuba 15 percent of the money goes into the the company that’s stable that’s big that’s well-known 5 percent of the money goes into that growing company the one
That’s a little more speculative but it’s growing really fast so for instance the the first two stocks we pick for commodities companies so the huge commodity company would get 15% of your port of your total money in your portfolio the growth commodity company would get 5% of your money so if you had $100,000 to invest $15,000 will go into the big huge company
That’s well diversified all those kinds of things so i’d be 15,000 and then 5% would go into that growth company which would be $5,000 now you have $20,000 invested of the hundred thousand next one for the next stocks down next one for the next stocks so it’s the 15 or five message method 15 percent of money goes into those huge companies that grow a lot or excuse
Me that don’t grow a lot but they’re stable five percent goes to the companies that have huge growth and are more speculative but can maybe bring you those huge gains guys so basically as you go down the little stocks basically 75% of the money will be in safe huge corporations 25 percent of money will be in those growth beset can maybe make you a lot of money over
Time but the little riskier which is why you don’t want to put that type of money into it and this type of stock portfolio is like i spoke about it’s great for if you’re age 40 plus you know if you’re age 40 50 60 you don’t want to be taking huge risks like i take where i go into two or three stocks because it’s it’s harder to bounce back fear that old and at the
Same time this would also be great for someone who wants to invest their money wants to pick stocks but doesn’t want to take as much risk so you want to be diversified so you want ten stocks to hold or what not because you don’t want to put so much money into a stock in case you’re wrong or in that stock so someone that just doesn’t want to take that type of risk
Is more of a conservative person but wants to pick their actual stocks this is a great way to do that guys i hope this video helped tremendously today i’m happy to be back from vacation i just got back today and i’m happy to be excited about making videos i haven’t made videos for over a week but you’ve probably been watching my videos which i recorded actually before
Went on vacation i just you know scheduled them all to release one day and the next day and next day so i am feeling fresh i’m feeling great to make some awesome videos for you guys going into this new year i hope you enjoyed today’s video if you came across and you have not subscribed yet you may want to we talked personal finance on the channel entrepreneurship
On the channel and we talked stock market and how to make your money into money thank you for watching guys and have a great day
Transcribed from video
How to do a Perfectly Diversified Stock Market Portfolio! By Financial Education
